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South Korea to submit new climate plan in September

  • Market: Emissions
  • 25/02/25

South Korea will submit its new national climate plan, or nationally determined contribution (NDC), to the UN in September, after the deadline of 10 February.

The government plans to establish the 2035 NDC with a "challenging and feasible" greenhouse gas (GHG) reduction target, announced the Presidential Commission on Carbon Neutrality and Green Growth on 24 February. South Korea's 2030 NDC, which was submitted in December 2021, aims for a 40pc reduction in emissions by 2030 from 2018 levels.

The government also plans to establish the "4th National Climate Crisis Adaptation Measures" for 2026-30. This will include measures to alleviate price volatility of agricultural products owing to the climate crisis, among others.

UN climate body the UNFCCC had set 10 February as the deadline for countries to submit their third NDCs, which are supposed to set out climate action and targets up to 2035. But many countries have missed the deadline, while research group Climate Action Tracker found that several are not aligned with Paris accord goals.

By Tng Yong Li

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23/12/25

UK refiners seek unused CO2 allowances after closures

UK refiners seek unused CO2 allowances after closures

London, 23 December (Argus) — UK downstream association Fuels Industry UK has urged the government to reallocate unused free CO2 allowances from two recently closed refineries to help remaining plants cope with rising emissions compliance costs. The group wants allowances granted under the UK Emissions Trading Scheme (ETS) for the 150,000 b/d Grangemouth and 105,700 b/d Lindsey refineries to be redistributed. Each allowance permits the holder to emit one tonne of CO2 equivalent. Grangemouth and Lindsey were allocated 441,925 and 541,475 allowances for 2025, respectively. It is unclear how many remain after their closures in April and August. The association warned the sector "may not survive that long" without temporary support, citing carbon costs that exceed those faced by overseas competitors until the UK's carbon border adjustment mechanism (CBAM) takes effect. ExxonMobil's 270,000 b/d Fawley refinery — the UK's largest — will spend $70mn-80mn on carbon costs this year, rising to $150mn within five years, the company's UK chair Paul Greenwood told MPs during an Energy Security and Net Zero Committee hearing in October. Fuels Industry UK chief executive Elizabeth de Jong also addressed the committee, highlighting broader cost pressures. It remains unclear whether refined fuels will be covered by the UK CBAM, which starts in January 2027. Fuels Industry UK is seeking confirmation that they be included from January 2028, and it wants additional free UK ETS allowances distributed to sectors not covered by CBAM during a "volatile" period linked to expected UK-EU carbon market linkage. Such linkage would exempt UK and EU from each other's CBAMs, but talks have yet to start. UK refiners have also missed out on government energy price support schemes during the gas price surge triggered by Russia's invasion of Ukraine, de Jong told MPs. Refiners paid market rates to power operations at their UK sites, missing out on discounts afforded to UK companies under the Energy Bill Relief Scheme, which ran between October 2022-March 2023, and then under the Energy Bills Discount Scheme between April 2023-March 2024. By contrast, US refiners access natural gas at roughly one-third of UK prices, Greenwood said. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Policy is key for Cop 30 sustainable fuels pledge

23/12/25
News
23/12/25

Policy is key for Cop 30 sustainable fuels pledge

London, 23 December (Argus) — A UN Cop 30 climate summit pledge, known as "Belem 4x", to quadruple "sustainable fuels" use over 2024-35 has so far drawn 27 signatories, including major biofuels producers and consumers. But such a substantial increase could face constraints, including feedstock and land availability, and will depend on supportive legislation. The signatories pledged at Cop 30 to "expand sustainable fuels use globally by at least four times by 2035 from 2024 levels", including by "adopting ambitious national policies". Sustainable fuels, in the context of the pledge, refers to liquid biofuels, biogases, "low-emissions hydrogen and hydrogen-based fuels", according to energy watchdog the IEA. The pledge follows an IEA report in October developed for the Cop 30 presidency, which found that a fourfold increase "is ambitious yet achievable". Under the IEA scenario, liquid and gaseous biofuels would meet around two-thirds of sustainable fuel demand in 2030, while hydrogen and hydrogen-derived fuels would "expand rapidly" after 2030. Cop 30 host Brazil proposed the pledge in September , based on the IEA's preliminary findings, and the commitment was launched with India, Italy and Japan at the pre-Cop event in Brasilia, Brazil in October. The pledge now has 27 signatories from Latin and North America, Asia, Africa and Europe, encompassing sustainable fuels producers and consumers. Canada, Indonesia, Mexico and the Netherlands are among the signatories. The pledge "sends an important political signal: scaling up sustainable fuels is not only necessary for climate goals, but feasible", the European Waste-based and Advanced Biofuels Association (Ewaba) told Argus . "Europe's biodiesel sector shows how sustainable biofuels can strengthen energy security, reduce import dependence and deliver immediate climate benefits using existing vehicles and fuel infrastructure," Ewaba added. Rising demand Sustainable fuels are typically used in transport sectors, which are among the highest-emitting, particularly in advanced economies. Although transport electrification is expanding, it is typically not moving fast enough to hit climate targets in line with the Paris Agreement, while shipping and aviation will require multiple decarbonisation solutions. Hydrogen and related fuels are also likely to see uptake from industry and power generation. Global demand for sustainable fuels doubled over 2010-24, and is already expected to grow this decade, boosted by policies designed to drive emissions reductions and support energy security. Conversely, the removal of tax credits for electric vehicles in the US, and recent weakening of the EU target for zero-emission cars are also likely to support increased biofuels consumption. The full implementation of existing and announced policies and targets, "plus the removal of market barriers, could lead to a near-doubling of sustainable fuel use in just six years", the IEA said. This could attract investment for new production capacity, it added. It also recommended prioritising infrastructure and supply chain development, as well as innovation funds for new technologies. The IEA found that sustainable fuels could cover 10pc of road transport demand, 15pc of aviation demand and 35pc of shipping fuel demand by 2035 — although it would "vary widely" by region. In an accelerated case, the IEA found that liquid biofuels could provide 8.07EJ in energy in 2030, up by 62pc from 2024 levels. The picture shifts by 2035 in the scenario, with biogas supply more than doubling and low-emissions hydrogen more than quadrupling, both from 2030. Land-use concerns But a near-term focus on increased biofuels production sparked concerns from several organisations about feedstock availability and the land conversion implications. "Such a massive uptake in biofuels could have calamitous consequences for the environment and climate, depending on how this pledge is interpreted," European non-governmental organisation (NGO) Transport & Environment (T&E) said. It flagged land cleared for crops such as palm oil, soy, sugarcane and corn. T&E projections show that "under current growth trends and policies, 90pc of biofuels will still be reliant on food and feed crops by 2030." The IEA noted "limited" expansion opportunities for biofuels from waste oils and fats, while it recommended improving crop yields for other feedstocks. But climate change is likely to hamper crop output. The UN Environment Programme warned recently that under a ‘business as usual' pathway, land degradation "is expected to continue at current rates, with the world losing fertile and productive land the size of Ethiopia or Colombia annually". Cop pledges often aim to drive an existing trend faster, and this is typically evident in the signatories — a coalition of the willing. Brazil has vast ethanol production capacity and strong domestic consumption mandates, like India, while another signatory, Chile, is forging ahead with renewable hydrogen production. The pledges, like all climate action, rely on strong policy, but commitment from key countries is more likely to achieve results. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: WCI changes still in the works

23/12/25
News
23/12/25

Viewpoint: WCI changes still in the works

Houston, 23 December (Argus) — The Western Climate Initiative (WCI) — the joint California-Quebec carbon market — has spent over two years waiting for clarity on potential program changes with growing concerns that it may not appear until 2026. Bullish sentiment initially pervaded the WCI market in December as California Air Resources Board (CARB) originally planned on publishing its long-awaited draft of cap-and-invest amendments by the end of the year. But this sentiment has been tempered by the possibility that CARB may instead release guidance on its plans because of the limited time left in the year, with a draft published in early 2026, sources said. The WCI partners are considering more-stringent program rules for 2027 and beyond, including increased incentives for participants to reduce greenhouse gas (GHG) emissions. But market participants may feel like they are experiencing deja vu — at this same time last year, they were expecting to see draft plans for updates to each program. CARB delayed publishing a draft of these program amendments multiple times over the last two years, which in turn has resulted in Quebec delaying the release of its own proposed changes. The agency earlier this year deferred to state legislators and their work to extend the state's 'cap-and-invest' program to 2045 from its previous 2030 sunset date. Lawmakers passed this program extension package, AB 1207 and SB 840, in September , putting the ball back in CARB's court. Staff at an October workshop said CARB planned to publish its amendment proposal, which includes changes required by the legislation, by the end of this year and bring it before its board for review by April. At the meeting, staff floated the idea of removing at least 118mn metric tonnes (t) from the 2027-2030 program allowance budgets to keep the program on target for a 40pc reduction in GHG emissions, compared with 1990 levels, by 2030. The agency previously considered setting a stricter 48pc or 55pc by 2030 target, which would have required the removal of a larger number of allowances through 2030. The change in the program's ambition was a central point of the agency's rulemaking discussions since they started in 2023 . The 40pc target is a more "viable" option at this time, but this decision is not final, CARB staff said in October. The change in the US economy and federal policy away from Inflation Reduction Act incentives and greenhouse gas regulation this year may have contributed to CARB's 2030 target shift, said Nick Roy, a national and state energy policy research associate with environmental policy think tank Resources for the Future. "It is probably true that there is not the governor's office pushing for the same level of ambition that they were originally because of federal policy changes," Roy said. WCI partner Quebec is considering removing 17.5mn allowances, equal to historical carbon offset use in the program, and limiting future offset use for compliance, the province's environment ministry said in an October 2024 market notice. The province has also weighed transitioning to a government purchase and retirement system to replace carbon offsets as part of these changes, but it has not provided further details. The province plans to publish its draft regulations in winter 2026, with adoption in spring-summer 2026. A formal proposal would shed light on CARB's plans going forward as well as how the agency plans to implement program changes required by AB 1207 and SB 840. CARB has one year to adopt the new regulations after it publishes the draft. Legal scrutiny Whether the administration of President Donald Trump plans to act on its threat of legal action against California's "cap-and-invest" program is still unclear. An 8 April executive order directed US attorney general Pam Bondi to evaluate legal action against state and local laws hindering the development or use of domestic energy resources. The order specifically cited California's carbon market. California Carbon Allowances for December delivery fell by more than $2.50/t to $26.74/t the day after the order, but have since climbed above $30/t. Market participants believe the Trump administration could target a proposed link between the WCI and the Washington state carbon markets. Such a link could happen in mid- to late-2027, according to California and Washington regulators. This could create a narrow window for any federal action before Trump leaves office in January 2029. The threat of federal legal action still pervades the market, but participants expect that a lawsuit becomes increasingly unlikely as time passes. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: CSAPR sentiment bearish despite coal use

22/12/25
News
22/12/25

Viewpoint: CSAPR sentiment bearish despite coal use

Houston, 22 December (Argus) — Expectations for lower prices is likely to persist in the federal Cross-State Air Pollution Rule (CSAPR) allowance markets next year as they remain oversupplied, even with higher levels of coal-fired generation. The seasonal NOx markets have been more active this year compared to 2024, when prices essentially flatlined due to regulatory and legal uncertainty brought about by a barrage of lawsuits filed against the US Environmental Protection Agency (EPA) for its "good neighbor" plan. That plan, which the agency finalized in 2023 under former president Joe Biden, sought to help downwind states meet the 2015 national air quality standards for ozone. The plan imposes more stringent ozone season NOx caps for power plants in more than 20 upwind states, as well as setting new limits on some industrial facilities. But the plan is now essentially defunct after the US Supreme Court halted its implementation in June 2024. This led the EPA to return to less-rigorous NOx emissions limits tied to older ozone standards and reshuffle the participating states into the Group 2 and "expanded" Group 2 markets. Argus launched its assessment of the latter in February 2025. EPA said in March it intends to reconsider the good neighbor plan in order to give states more freedom in developing their own ozone reduction plans. The announcement led to the US District of Columbia Circuit Court of Appeals pausing a lawsuit challenging the legality of the good neighbor plan until the agency completes its reconsideration, and which could culminate in new regulations by fall 2026. But those developments did little to move the seasonal NOx markets, which have already been sluggish due to oversupply and weak compliance demand, leading to more dramatic price fluctuations when trades do occur. Argus has assessed Group 2 allowances at $875/short ton (st) since 1 December and expanded Group 2 allowances at $850/st since 24 October. It is unclear how US president Donald Trump's current hostility towards environmental regulations will affect the administration's attitude towards the existing CSAPR allowance trading markets, but it seems likely that they are here to stay. The EPA likely is "digging into the air transport modeling that they have to understand what their options are," and which could potentially echo its determination during Trump's first term that states had adequately addressed downwind pollution, said Carrie Jenks, executive director of Harvard Law School's Environmental and Energy Law Program. "The EPA is committed to advancing cooperative federalism and working with states on state implementation plans (SIPs) to provide clean air for all Americans," the agency said in December. But extensive case law suggests that the EPA has little room to give states more power to manage emissions as they see fit. Both the DC Circuit Court and the US Supreme Court have made it clear that the EPA must intervene if a state does not sufficiently lower its emissions, Jenks said. "So the EPA's hands, regardless of who's in the White House, are really tied," she said. As a result, the EPA will likely try to prolong the issue by giving states more time to draw up their own ozone-reduction plans. The debates over those plans could revolve around how the modeling of emissions is conducted and interpreted. Even if that modeling is challenged in the courts, it can take years for litigation to get resolved. More coal, more emissions Despite the continued dearth of activity in the seasonal NOx markets, increases in coal-fired generation, a significant source of NOx and SO2 emissions, have buoyed the outlook in those markets, heightening expectations for higher emissions. During the past year, stronger power demand and higher natural gas prices have allowed coal to take a larger market share, which has resulted in increased coal-fired power in grids that serve states covered by CSAPR. But NOx emissions during this year's ozone season, which ran from May through September, were lower than expected, according to market participants. Cumulative emissions in the Group 2 and expanded Group 2 markets rose by just 1pc and 4.2pc, respectively, and remained well below their overall limits. It was likely more cost-effective for power plants to run their NOx controls than to purchase or surrender additional allowances for compliance. Still, given the Trump administration's pro-coal agenda, it remains to be seen for how long increases in coal generation will continue and to what extent that will affect the CSAPR markets. Conversations over ballooning data center demand have also bled into the seasonal NOx markets as the Trump administration seeks to leverage coal to power that boom. There are currently a lot of moving parts that make it difficult to make predictions, including how competitive coal is compared to other energy sources such as renewables, where data centers get built, their demand flexibility, and the federal and state regulatory landscapes in the coming years, Jenks said. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia releases key IFLM carbon method draft

22/12/25
News
22/12/25

Australia releases key IFLM carbon method draft

Sydney, 22 December (Argus) — The Australian government today released the exposure draft for the long-awaited Integrated Farm and Land Management (IFLM) carbon credit method ahead of a public consultation starting in late January. The draft method includes the regeneration of native forest on suppressed land as a proposed eligible activity, meeting a key demand from carbon project developers, but it excludes a previously planned soil carbon module . The method's "framework" design will enable the addition of future activities, including improvements to soil, as well as updates to measurement approaches and carbon pools over time, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) said on 22 December. The DCCEEW will allow two abatement-calculation approaches to estimate carbon stock change under the method, using Australia's Full Carbon Accounting Model (FullCam) — a model-only approach and a hybrid approach where modelled estimates are refined by measurements in the project. The hybrid approach will need to be legislatively drafted to be included in the final draft methodology determination. "The modular design enables more activities, technologies and carbon pools to be added over time, giving greater flexibility to land managers," the DCCEEW said. Three main activities The planned Australian Carbon Credit Unit (ACCU) method could be the first in the country to combine multiple activities that store carbon in the land on a single property. This aims to streamline participation and reduce the administrative burden compared with running multiple projects on the same land, the DCCEEW said. The module for regeneration of native forest on suppressed lands builds on the key human-induced regeneration (HIR) ACCU method, which expired in September 2023. But like the FullCam hybrid approach, it will require legislative drafting in 2026, as both components "are more complex than approaches already incorporated into the exposure draft". The method would also enable crediting of carbon from two modules which are already legislatively drafted — reforestation by environmental plantings, an activity with an existing method that was updated late last year , and regeneration of native forest on cleared lands, which is based on the expired native forest from managed regrowth (NFMR) method. Soil carbon is not in the draft because the Emissions Reduction Assurance Committee (Erac) — the statutory body responsible for ensuring the integrity of Australia's carbon crediting framework — is reviewing the Soil Organic Carbon 2021 method. This is because of the complexity of the review process , Erac chair Karen Hussey said last month. The outcomes of that review will inform the inclusion of a revised soil carbon module in the IFLM method in the future, the DCCEEW said. Contentious areas Uncertainties remained until recent weeks on whether a draft method would be submitted to Erac before the end of 2025. A summary paper of a stakeholder group meeting in September noted that some members had recommended postponing the IFLM method, as "a robust approach which clearly demonstrated integrity was more important than timelines". The inclusion of regeneration of native forest on suppressed land has proved to be a contentious issue. "There has been considerable research into the impacts of grazing management on the diverse ecosystems in Australia, including the different approaches to quantify the changes in vegetation, and in existing HIR projects," the DCCEEW said today. "Uncertainties remain and this issue is still an active area of research." But the IFLM draft settings provide confidence that the method is robust and that credited abatement is additional, as it will establish new eligibility criteria, require on-ground measurements and apply conservative abatement estimates in early project years, the DCCEEW noted. Projects will need to use the FullCam hybrid approach to estimate abatement for this activity module. This will reduce the potential for over-crediting or under-crediting abatement, particularly for lower-rainfall environments where there can be less certainty in attributing the regeneration to project activities. Projects will also need to have a low initial carbon stock at the start of their 25-year crediting period, and will need to achieve forest cover during that period. They will also have a baseline period of 20 years compared with 10 years for HIR projects. This is the time over which the project land area must not have had forest cover because of suppression mechanisms such as grazing pressure, chemical or mechanical destruction of regrowth, or the presence of non-native plants. Finally, the department is proposing to apply discounts when attributing carbon stock change to projects under that module, including a temporary 5-25pc attribution discount to address climate-related uncertainties. Existing HIR, NFMR or environmental plantings projects will be able to transfer their projects to become IFLM projects if they meet eligibility requirements in the final IFLM method. They will also be able to add additional land to the project area to undertake additional abatement activities. Consultation to start on 27 Jan The release of the draft method and other documents allows an early review of the material before a formal, 28-day consultation period starts on 27 January, the DCCEEW said today. Feedback will help Erac decide whether the method complies with Australia's offsets integrity standards and it will recommend it to assistant minister for climate change and energy Josh Wilson. The DCCEEW intends to provide a final IFLM methodology determination for Erac's consideration "in 2026", it said, without disclosing a specific timeline. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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